Budget 2012: Will govt tax diesel vehicles?

Finance Minister Pranab Mukherjee will announce the Union Budget on March 16 and the auto sector will be keenly tuned in for any helping hand from the government to push up slowing sales, and will also look for clarity on issues like a possible tax on diesel cars.

Several experts have said that diesel used for passenger vehicles should be taxed more, or there should be more taxes on diesel cars, to offset some of the losses of oil marketing companies. This move is hugely opposed by auto makers, who fear any such additional tax would hurt car sales even more.

Auto makers have also called for step up in infrastructure spending by the government and extension of excise benefits for research and development.

The auto sector will be keenly tuned in for any helping hand from the government to push up slowing sales.